Santa Tried To Warn Us

As we watch the metals get savagely beaten this morning, I'm reminded of the warning that Santa posted last Friday and again yesterday. The Cartel is trying again to take down paper price. Will they succeed? Maybe...

Here are the two main components of his post. Remember, this was first posted last Friday so when he says "next week", he's talking about now:

"Next week is the war between manipulation of gold by the West, and appetite for buying gold in the East, both from friendlies and enemies. Anyone that does not see today’s gold market as a rig is blind or brain dead. There is a full blown crisis in Western world banking today, right here and now. There is a full blown crisis in sovereign debt of some weaker nations as in a very short while certain government will be out of money. The Eurosnobs hate each other which does not make for a fast reconciliation of a crisis."

"Next week will be the time the cartel tries to break the gold price again. They have failed seven times, and will fail on the 8th. Gold is going to $3500 and above. All the lying and conniving only means the price will go higher. Just as Morgan’s whale could not fight the market, the cartel cannot fight gold as we have a flight away from all fiat currencies."

So, there you go. As you know I, too, have been concerned about a short-duration, Cartel-inspired plunge that would attempt to take out the plethora of sell stops below 1525 and 26. Can they pull this off? You know they want to. Can they? That is the question. Global physical demand remains extraordinarily strong ( http://www.zerohedge.com/news/china-imports-more-gold-hong-kong-five-months-all-uk-combined-gold-holdings) so driving down paper price will only increase the flow out of the LBMA member vaults. We'll justhave to see how this battle plays out.

"The end of US hegemony is near and with it, the end of the US dollar as "world reserve currency". This catastrophe and all in entails could have been avoided with responsible leadership and an educated/involved populace. However, selfishly, we in the US decided it was best to pursue a plan where we foolishly thought our recklessness was beneficial. This attitude was best summarized by republocrat and Keynesian legend, John Connally, who, as the coin was dropped in 1973, told the world that "the dollar is our currency but it is your problem". Sadly, we allowed Mr. Connally to be prescient for almost 40 years but the world is about to turn the tables. Soon...very soon...the coin will finally reach the narrow end of the funnel and the bottom will simply drop out. What happens next will not be fun and games."

​OK, that's all for now. I've got a full day of meetings ahead of me but I'll be watching this closely and I'll certainly update the blog if needed. Hang in there and be patient.

THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated.

Santa Jim knows more then anyone of us what's going on and what he see's coming. He get's my benefit of the doubt due to his experience and knowledge and out of the box view.

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I think Michael Pento is right. This EU flood will mostly make it's way over here but the US capital that gets offered up here at home to credit eligible consumers will be spent mostly here.

The wave of US money held by banks will be like a tsunami of easy credit at such super low rates that people will feel compelled to take on available and easy credit. And then spend it into the economy like people are prone to do. The Govt needs to have people spend/consume as much as possible to provide badly needed tax revenues in the end game.

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ECB Says Overnight Deposits Fall to Lowest in Seven Months

By Jana Randow - Jul 12, 2012 5:52 AM ET

The European Central Bank said overnight deposits from financial institutions dropped by more than half to the lowest level in almost seven months after policy makers stopped paying interest for the funds.

Financial institutions are no longer remunerated for the money they deposit at the ECB overnight after last week’s interest-rate cuts took effect yesterday. Policy makers reduced the main refinancing rate on July 5 to a record low of 0.75 percent and cut the deposit rate to zero to stimulate credit supply and lending.

“It’s a miracle that banks used the facility at all,”Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt, said in an interview. “Most banks are putting their money into reserve accounts instead. There’s no reason to believe that excess liquidity is declining.”

The ECB has flooded financial markets with more than 1 trillion euros of cheap three-year loans to unlock credit. As a result, overnight deposits, a measure of excess liquidity in the system, surged and have hovered around 800 billion euros until earlier this week.

Liquidity Creation

“I would not make too much of the levels that these deposits are reaching, because it is just a mechanical consequence of the liquidity creation,” ECB President Mario Draghi said on March 8....

Sitting tight is the hardest thing to do for some folks. Nows the time to buy some physical if you can or just sit on your stack.

I had just gone over to Jim's blog just to see whats been going on lately when you posted this Turd. The amount of gold and silver leaving these shores at these prices is already epic. I can't imagine how much will leave if it goes even lower. QE3 right around the corner.

We have 3 total now, plan on getting more, 50 gallons, one each for the snow peas & tomatoes, strawberries & blueberries, and asparagus planters. Got 'em at McLendons, also the curved black trellis you see, they are great for the snow peas (climb to 7 feet high here in the Pacific Northwest). The pavers we got off craigslist, all our raised beds are made from recycled free stuff

Volatility Ratios

One of my former "secret indicators"
This one deserves 5 minutes of study.
You don't want to be on the wrong side of this spikes, however, trouble is we had a stealth combo spike up spike down that is clear on the candle charts.

"Sprott Physical Silver Trust is expected to announce the results of its latest foray into the raising capital business. After the markets closed Wednesday, the issuer announced a follow on offering of trust units via a marketed deal. Accordingly no issue size was given: instead a book will be built and priced (in US$) in the context of the market. The units closed Wednesday at US$11.48."

Is this the game changer event of which TF knew? Considering that his first purchase blew the silver market up to nearly $50/oz and the rumors that PFG was taken down because Comex could not deliver silver, this could be a biggie.

silver seems to be supported at 26.50--gold 1550--and thats what Santa said give or take--a test--

and it would be a failed test.

Bottom line--unless this country follows the route of Erskine Bowles, gold and silver will be at higher multiples of what they are now.

If we do follow what he said, the next few years will be bleak economically.

Our genius leaders in giving the children (and the banks are included in being children and playing with fire) what they wanted, have squeezed this country between the proverbial rock and hard spot.

Risk to downside on PM "should" be small except for the the cartel which if they had any brains given the LIBOR fiasco, they would be cleaning their desks and running away with the bonuses they earned asap.

I am loading up on NUGT--at 8 bucks its a permanent option and if HUI triples like it did from 2008 NUGT would be a hell of an investment.

then use it to buy more physical even if prices are higher. Somewhere in here hui will triple while gold doubles and "professional" managers will realize its not perfect but a ton will fall to the bottom line.

I wondered why it gapped down 5% this morning. It's recovering a bit now, but I wonder what caused the big drop. I wouldn't think this offering would dilute the shares I have, but allow for more physical bullion to be acquired. I guess it's a good in the long term, bad in the short term kind of thing.

...if you allow yourself to consider the possibilities and believe the technology mentioned is capable of what is described.

I'm not sure what to think after reading it. Part of me admittedly out of fear wants/needs to think that it's paranoid BS and not possible in the U.S. but the other logical part has to admit that the tendencies and actions that are happening domestically would seem to point towards this actually happening as time and technology marches on.

The U.S. is leading the way in drone technology and manufacturing and we use it extensively abroad so using it here seems like a logical next step. I can see the day where a drone strike happens on US soil within 5 years.

Southern border? Idk, but it seems inevitable that it happens at some point in the future somewhere on US soil.

TORONTO, July 12, 2012 /CNW/ - Sprott Physical Silver Trust.....announced today that it has priced its follow-on offering of 18,100,000 transferable, redeemable units of the Trust ("Units") at a price of US$11.05 per Unit (the "Offering"). As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 2,715,000 additional Units. The gross proceeds from the Offering will be US$200,005,000 (US$230,005,750 if the underwriters exercise in full the over-allotment option).

The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus......

So, with proceeds of $200 million and a silver price of $27 an ounce, that comes out to about 7.4 million ounces to be purchased. With the full over-allotment, that's about 8.52 million ounces.

Substantial, yes, but the cartel could sell (and has sold in the past) multiples of that with a few keystrokes =)

You would lose that money to either the government or the LCS guy's premium anyway.

The cost of conversion back to fiat is the issue. When you convert the US Gold Eagle to fiat, there is no capital gains tax. If you like, you can buy both gold coins in US AGE rather than diversifying to the CML. The same applies to buying a PRC Panda, SoAf Krug, AUS phil, or other.

we are down to the either or situation I first heard from Richard Russell.

Inflate or die

and unless they cut the deficit they have to inflate-its just a matter of who does the buying of treasuries. Not sure how it will sit with public to force them to put treasuries in 401k's which is why they will not end the 401k. Too much there to buy treasuries.

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